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Sharp Teeth or Empty Mouths? Revisiting the Minimum Wage Bite with Sectoral Data

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Listed:
  • Garnero, Andrea

    (OECD)

  • Kampelmann, Stephan

    (Free University of Brussels)

  • Rycx, François

    (Free University of Brussels)

Abstract

The paper explores the link between different institutional features of minimum wage systems and the minimum wage bite. We notably address the striking absence of studies on sectoral-level minima and exploit unique data covering 17 European countries and information from more than 1100 collective bargaining agreements. Results provide evidence for a neglected trade- off: systems with bargained sectoral-level minima are associated with higher Kaitz indices than systems with statutory floors, but also with more individuals actually paid below prevailing minima. Higher collective bargaining coverage can to some extent reduce this trade-off between sharp teeth (high wage floors) and empty mouths (noncompliance/noncoverage).

Suggested Citation

  • Garnero, Andrea & Kampelmann, Stephan & Rycx, François, 2013. "Sharp Teeth or Empty Mouths? Revisiting the Minimum Wage Bite with Sectoral Data," IZA Discussion Papers 7351, IZA Network @ LISER.
    • Handle: RePEc:iza:izadps:dp7351
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    References listed on IDEAS

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    1. Charles Brown & Curtis Gilroy & Andrew Kohen, 1982. "The Effect of the Minimum Wage on Employment and Unemployment: A Survey," NBER Working Papers 0846, National Bureau of Economic Research, Inc.
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    3. François Rycx & Stephan Kampelmann, 2013. "Who Earns Minimum Wages in Europe? New Evidence Based on Household Surveys," DULBEA Working Papers 13-01, ULB -- Universite Libre de Bruxelles.
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    Cited by:

    1. Michael R. Strain & Peter Brummund, 2016. "Real and permanent minimum wages," AEI Economics Working Papers 875967, American Enterprise Institute.
    2. Stijn Broecke & Glenda Quintini & Marieke Vandeweyer, 2018. "Wage Inequality and Cognitive Skills: Reopening the Debate," NBER Chapters, in: Education, Skills, and Technical Change: Implications for Future US GDP Growth, pages 251-286, National Bureau of Economic Research, Inc.
    3. Eliasson, Tove & Nordström Skans, Oskar, 2014. "Negotiated wage increases and the labor market outcomes of low-wage workers: evidence from the Swedish public sector," Working Paper Series 2014:10, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    4. Piotr Lewandowski & Agnieszka Kaminska, 2015. "The effects of minimum wage on a labour market with high temporary employment," IBS Working Papers 7/2015, Instytut Badan Strukturalnych.

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    More about this item

    Keywords

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    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects

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